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N80bn Unclaimed Dividends: Banks, Registrars to Appoint E-Dividend Champions

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Godwin Emefiele on banking

As part of measures to address the rising trend of unclaimed dividends in the nation’s capital market, which has hit the N80 billion mark, banks and registrars have been mandated by both the Central Bank of Nigeria, CBN and the Securities and Exchange Commission, SEC to set up e-dividend champions in their respective institutions.

Also, work is underway to address overlapping functions between the Debt Management Office, DMO and SEC, just as the commission is to use moral suasion in attracting telecommunication companies, oil and gas and other blue chip companies to list on the Nigerian Stock Exchange, NSE.

It was also gathered that the commission is canvassing for tax concessions that will attract more investment into the capital market.

The National Assembly is working closely with the DMO and SEC to address the overlapping functions observed in the discharge of duties by both organisations.

Specifically, the Director General of SEC, Munir Gwarzo confirmed that work is underway to address the overlapping functions in both institutions.

According to him “Very soon we will give you the details where there are overlapping functions between the two institutions.” The SEC DG further hinted that the CBN will also sanction banks that fail to comply with the free e-dividend mandate which is expected to end on 31st December 2016.

Gwarzo said attaching deadline to e-dividend registration was necessary to ensure compliance by investors, observing that any bank that fails to comply with free mandate processing on e-dividend will be duly sanctioned.

He said “SEC has been in the vanguard for people to register for e-dividends, but whenever you go to the bank or any of the registrars, people tend to be frustrated because there seems to be some misunderstanding between the banks and the registrars.

So, we had a very successful meeting last Monday where we had all the registrars, all the heads of operations of banks, we also got the Director of Payment System of the CBN and Director of NIBSS and we sat down and exhaustively discussed the issue and we resolved that each bank is going to appoint an e-dividend champion and CBN will as well direct the banks to have these e-dividend champions.

“The e-dividend champion will be the one that will liaise with the head of operation of each bank and every registrar is also expected to have e-dividend champion. We agreed that every Compliance Officer for every registrar will serve as e-dividend champion.

We also agreed that any time the registrar or the banks have any issue that requires clarification, Nigeria Inter-Bank Settlement System, NIBSS will provide the clarification. The registrars also agreed that whenever they have any issue with respect to identity of an investor, within three to four days, they will reach out to the bank or NIBSS.”

He explained that once an investors registers for e-dividend, the backlog of his/her unclaimed dividend that are not yet status-barred would be credited to his account by his registrar. He added that SEC would continue to underwrite the registration for e-dividend until December 2016, saying that registration after the stipulated timeline would attract a token fee.

As part of its advocacy programme, he said the commission has met with all the strata of the government in an effort to get their buy-in to the Capital Market Master Plan and recently with the Minister of Finance, Mrs Kemi Adeosun, with regards to considering tax concessions that will attract more investment into the capital market.

“The Capital Market Master Plan Implementation Committee, CAMIC, met the President of the Federal Republic of Nigeria; we also met the Governor of the Central Bank, the Attorney General of the Federation, and Speaker of the House of Representatives. This is to ensure that we have their buy-in because for you to be able to implement the Master Plan successfully, you need the buy-in of the executive, legislature and the judiciary.

“You will recall that in February this year, we had a two-day session with the judiciary in which we discussed with them what the capital is, what the SEC is and largely what the Investment and Securities Act, ISA, so that we can get their support and cooperation.

We also had a two-day session with the National Assembly; SEC partnered with the Committee on Capital Market both at the House of Representatives and Senate and we had a very successful outing. That is part of our advocacy strategy so that we have all the levels of government buy into the master Plan.”

“Just last Saturday, we had very successful meeting with the Minister of Finance and we had in attendant the chairman of the Federal Inland Revenue Services, FIRS, and the DG of Debt Management Office, DMO. For the last 30 – 40 years, the capital market has been clamouring for certain concessions with respect to tax and certain capital market products which we believe that will further enhance the development of the market” the SEC DG added.

“We have no other place to invest our little funds than in our market and that is why we are trying to cultivate your appetite and the only way to do that is to address some of these issues. Once these issues are addressed and the retail investor returns, we will be able to raise participation in the market from 2 per cent it is now to about 4 per cent in the next 10 years.”

Continuing he said “The BVN platform that is being provided for the e-Dividend will also enable us to implement other initiatives in the market. For instance with the BVN platform everyone that operates in this market as an investor will have his data within this system, so if anyone wants to defraud, it cannot be done. People cannot impersonate others as the platform will expose them.”

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

Crude Oil

Oil Posts 2% Gain for the Week Despite India Virus Surge

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Crude Oil - Investors King

Oil prices steadied on Friday and were set for a weekly gain against the backdrop of optimism over a global economic recovery, though the COVID-19 crisis in India capped prices.

Brent crude futures settled 0.28% higher at $68.28 per barrel and U.S. West Texas Intermediate (WTI) crude advanced 0.29% to $64.90 per barrel.

Both Brent and WTI are on track for second consecutive weekly gains as easing restrictions on movement in the United States and Europe, recovering factory operations and coronavirus vaccinations pave the way for a revival in fuel demand.

In China, data showed export growth accelerated unexpectedly in April while a private survey pointed to strong expansion in service sector activity.

However, crude imports by the world’s biggest buyer fell 0.2% in April from a year earlier to 40.36 million tonnes, or 9.82 million barrels per day (bpd), the lowest since December.

In the United States, the world’s largest oil consumer, jobless claims have dropped, signalling the labour market recovery has entered a new phase as the economy recovers.

The recovery in oil demand, however, has been uneven as surging COVID-19 cases in India reduce fuel consumption in the world’s third-largest oil importer and consumer.

“Brent came within a whisker of breaking past $70 a barrel this week but failed at the final hurdle as demand uncertainty dragged on prices,” said Stephen Brennock at oil brokerage PVM.

The resurgence of COVID-19 in countries such as India, Japan and Thailand is hindering gasoline demand recovery, energy consultancy FGE said in a client note, though some of the lost demand has been offset by countries such as China, where recent Labour Day holiday travel surpassed 2019 levels.

“Gasoline demand in the U.S. and parts of Europe is faring relatively well,” FGE said.

“Further out, we could see demand pick up as lockdowns are eased and pent-up demand is released during the summer driving season.”

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Commodities

Lagos Commodities and Futures Exchange to Commence Gold Trading

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gold bars

With the admission of Dukia Gold’s diversified financial instruments backed by gold as the underlying asset, Lagos Commodities and Futures Exchange is set to commence gold trading.

According to Dukia Gold, the instruments will be in form of exchange-traded notes, commercial papers and other gold-backed securities, adding that it will enable the company to deepen the commodities market in Nigeria, increase capacity, generate foreign exchange for the Nigerian government to better diversify foreign reserves and create jobs across the metal production value chain.

Tunde Fagbemi, the Chairman, Dukia Gold, disclosed this while addressing journalists at Pre-Listing Media Interactive Session in Lagos on Thursday.

He said, “We are proud to be the first gold company whose products would be listed on the Lagos Futures and Commodities Exchange. The listing shall enable us facilitate our infrastructure development, expand capacity and create fungible products.

“This has potential to shore up Nigeria’s foreign reserve and create an alternative window for preservation of pension funds. A gold-backed security is a hedge against inflation and convenient preservation of capital.”

“As a global player, we comply with the practices and procedures of London Bullion Market Association and many other international bodies. Our refinery will also have multiplier effects on the development of rural areas anywhere it is located,” he added.

Mr Olusegun Akanji, the Divisional Head, Strategy and Business Solutions, Heritage Bank, said the lender had created a buying centre for verification of quality and quantity of gold and reference price to ensure price discovery in line with the global standard.

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Crude Oil

Oil Nears $70 as Easing Western Lockdowns Boost Summer Demand Outlook

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Crude oil

Oil prices rose for a third day on Wednesday as easing of lockdowns in the United States and parts of Europe heralded a boost in fuel demand in summer season and offset concerns about the rise of COVID-19 infections in India and Japan.

Brent crude rose 93 cents, or 1.4%, to $69.81 a barrel at 1008 GMT. U.S. West Texas Intermediate (WTI) crude rose 85 cents, or 1.3%, to $66.54 a barrel.

Both contracts hit the highest level since mid-March in intra-day trade.

“A return to $70 oil is edging closer to becoming reality,” said Stephen Brennock of oil broker PVM.

“The jump in oil prices came amid expectations of strong demand as western economies reopen. Indeed, anticipation of a pick-up in fuel and energy usage in the United States and Europe over the summer months is running high,” he said.

Crude prices were also supported by a large fall in U.S. inventories.

The American Petroleum Institute (API) industry group reported crude stockpiles fell by 7.7 million barrels in the week ended April 30, according to two market sources. That was more than triple the drawdown expected by analysts polled by Reuters. Gasoline stockpiles fell by 5.3 million barrels.

Traders are awaiting data from the U.S. Energy Information Administration due at 10:30 a.m. EDT (1430 GMT) on Wednesday to see if official data shows such a large fall.

“If confirmed by the EIA, that would mark the largest weekly fall in the official data since late January,” Commonwealth Bank analyst Vivek Dhar said in a note.

The rise in oil prices to nearly two-month highs has been supported by COVID-19 vaccine rollouts in the United States and Europe.

Euro zone business activity accelerated last month as the bloc’s dominant services industry shrugged off renewed lockdowns and returned to growth.

“The partial lifting of mobility restrictions, the expectation that tourism will return in the near future, and the lure of the psychologically important $70 mark are all likely to have contributed to the price rise,” Commerzbank analyst Eugen Weinberg said.

This has offset a drop in fuel demand in India, the world’s third-largest oil consumer, which is battling a surge in COVID-19 infections.

“However, if we were to eventually see a national lockdown imposed, this would likely hit sentiment,” ING Economics analysts said of the situation in India.

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